Cost Cutting to Reach the Bottom Line

When bottom line cost cutting becomes a priority, company executives face intense pressure to deliver results and provide those savings quickly. This can create much angst, as executives struggle with how to meet goals quickly, while thinking strategically about long-range goals.

The solution is to look at cost cutting as a journey, not a quick fix. It helps to think along two tracks simultaneously and look for short-term and long-term opportunities. This is particularly relevant when looking at real estate cost savings, as there are decisions that can have an impact within 90 days, and those that will require much more detailed evaluation.

Begin by reviewing your lease obligation to identify these top five short-term opportunities:

Subleasing

Extending term

Reconfiguring

Terminating

Consolidating

By identifying these types of opportunities and compiling projections on potential cost savings, you can meet short-term, cost-cutting goals. Read more about this low-hanging fruit here.

Next, turn to the long-term real estate plan:

Employee shifts and reallocations
Do you have the right people in the right locations? How are your employees deployed across multiple locations? How can you make adjustments in human capital for more efficiency in the long term?

Recruitment
Can you make your space—its location, layout and overall vibe—work for you in the recruitment and retention of key personnel and talent?

Salary and benefit reviews
Are there opportunities to create savings on insurance costs, recruitment or other expenses?

Overall expense review
Take into account raw space costs, as well as all operating costs

In today’s competitive environment, the key to bottom line cost reductions is to strategically look at both short- and long-term priorities. This allows for real estate and other expenses to be properly analyzed and reviewed in a global context.